Question

Answer each of the following: What is the purpose of the alternative minimum tax and who pays it? How was the individual alternative minimum tax impacted by the December 2017 tax reform law? Review available tax credits discussed in chapter 12 of the text. Compare the tax credits that you actually take with the tax credits you would like to take. Explain why you made the particular selections. For the tax credit(s) that you would like to take, explain why you are not able to take the tax credits(s). For the tax credits that you actually take, explain the benefits that you receive from the tax credit(s). If you have never prepared a tax return or looked at this information before, what do you find most significant about the information that you read about tax credits? How, if at all, were the tax credits that you take or would like to take impacted by the December 2017 tax reform law?

Answer 1

Answer;-

some times tax payers make more than the exemption and use many common deductions

• The reason AMT is to improve tax collectivity from those in higher   brackets is   because eliminates many of those deductions.
• Person who claim exemptions exceed their gross income considered   for AMT.
• Who Has the Pay the AMT

   You most effective must fear concerning the AMT in case your adjusted gross    income exceeds the exemption. If you make that revenue or above, that is the AMT taxable sales. You may also must calculate the AMTI and pay the higher tax. You can do so on type 6251. Your tax application package will also do it for you. Which you could additionally go to the IRS AMT Assistant

• While you qualify for the AMT in a tax year, you ought to pay it. But that you could adjust your spending to lower the AMT for the next yr. There are 4 long-established methods.
  If you're an worker, get your company to reimburse you.
  Be certain your state tax withholding isn't larger than your anticipated cost. State tax payments are not deductible underneath the AMT.
  Pay your house taxes simplest when they are due. Don't prepay your next installment by way of the tip of the year. .
• However income below $75000 then AMT not applicable.IT Means AMT rate is zero in case of  income less than 75000.
• Sales percentage Who Pay AMT
  $zero - $75,000 zero%
  $75,000 - $one hundred,000 0.2%
  $a hundred,000-$200,000 1.9%
  $200,000-$500,000 29.Four%
  $500,000 - $1M 62.9%
  $1M+ 19.9%
• Why failed to Congress eliminate the unpopular substitute minimal Tax, as Trump promised? Our elected officers can not turn down the additional income. The AMT produces around $60 billion a year in federal taxes from the top 1 percentage of taxpayers. Consequently, it is a innovative tax.

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